blackberry - a fundamentals of management project

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FUNDAMENTALS OF MANAGEMENT COMPREHENSIVE RESEARCH ANALYSIS OF RESEARCH IN MOTION (RIM) Submitted By:- ARUSHI SHARMA | HISHAM A RIZVI DIVIK GIRDHAR | DRISHTI RANA

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Page 1: Blackberry - A Fundamentals of Management project

FUNDAMENTALS OF MANAGEMENT

COMPREHENSIVE RESEARCH ANALYSIS OFRESEARCH IN MOTION (RIM)

Submitted By:-ARUSHI SHARMA | HISHAM A

RIZVIDIVIK GIRDHAR | DRISHTI RANA

Page 2: Blackberry - A Fundamentals of Management project

THE COMPANY BEHIND BLACKBERRY

Research In Motion

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Research In Motion

- A Brief History

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1984Two engineering students - Mike

Lazaridis (University of Waterloo) and Douglas Fregin (University of Windsor) - co-

found Research in Motion. The company was set up as an electronics and computer

science consulting business based in Waterloo.

1988The company becomes the

first wireless data technology developer in North America.

The technology is mainly used for business

communications, such as processing credit-card sales.

1992The focus shifted to two-way wireless

communication when the research staff found a way to send messages

back as well. Jim Balsillie joins RIM, putting

$250,000 of his own money into the company.

1996RIM introduces its first wireless handheld, the

Inter@ctive Pager.

1997RIM is listed on the Toronto

Stock Exchange as a publicly traded company - and

raises more than $115 million from investors.

1998RIM introduces its first BlackBerry, a wireless

handheld computer. It offered a six-line display and allowed basic e-mail and two-way paging.

RIM is ranked as one of Canada's fastest-growing technology companies.

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1999RIM is listed on the

NASDAQ exchange. The company raises another $250 million to develop

its BlackBerry technology.

November 2000RIM raises another $950 million through a share

offering.

2002RIM upgrades the BlackBerry to

include voice and data transmission. E-mail capabilities are

improved so users can access multiple e-mail accounts.

2007RIM announces that its

BlackBerry subscriber list has passed the 10-million mark.

October 2007Alcatel-Lucent announces an agreement to distribute BlackBerry smartphones in China. The news sends RIM shares up eight per

cent, making RIM the most valuable company in Canada, based on market capitalization

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GROWTH OVER THE YEARSYear Sales

Operating Income

Net Income

2002 294,000,000 58,000,000 28,000,0002003 307,000,000 64,000,000 149,000,0002004 595,000,000 78,000,000 52,000,0002005 1,350,000,000 386,000,000 206,000,000

2006 2,066,000,000 617,000,000 375,000,000

2007 3,037,000,000 807,000,000 632,000,000

2008 6,009,000,000 1,731,000,000 1,294,000,000

200911,065,000,000

2,722,000,000 1,893,000,000

201014,953,000,000

3,507,000,000 2,457,000,000

201119,907,000,000

4,639,000,000 3,444,000,000

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SELECTED PRODUCT LINE 

RIM’s most notable product is easily a mobile device dubbed the “BlackBerry”. This revolutionary smartphone has implemented itself

into the everyday lifestyle of millions of individuals in over 140 countries.

 

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THE SMARTPHONE MARKET-THE CURRENT SCENARIO

A smartphone was defined as a mobile phone that offers more advanced computing ability and connectivity than a contemporary

basic featured phone. For e.g.: Apple iPhone, Blackberry, Nokia’s high-end series.

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•As part of our project, a survey was conducted on a sample of 56 individuals, from the age group 15-55, comprising 21 males and 25 females.

•The survey, although conducted on a small scale, shows some emerging trends and demographics. The results were as follows:

PRIMARY RESEARCH

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PRIMARY RESEARCH

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• Smartphones are still a niche market, though there is huge scope for expansion.

• Nokia and RIM (BlackBerry) are dominant players in the Indian smartphone market, while Apple is a core competitor.

• Indian smartphone users spend more time on the Internet than on traditional voice calls and SMS of that time goes into gaming, entertainment, and Internet.

• Traditional voice calls and text messaging take a mere 8% of the time, and the rest of the time is spent on social networking and instant messaging. 

OUR ANALYSISOF THE SURVEY

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• The common user considers BlackBerry’s BBM service to be its core competence, and a differentiating factor from other smartphones available in the market.

• The smartphones manufacturing companies’ target market is slowly shifting from ‘professionals-only’ to a mix of professionals and general users.

 • The given mix of responders agreed to the fact that if given a chance,

and if their financial status permits, they would buy a BlackBerry device without hesitations.

 • Though Nokia is a dominant player even now, its numbers over the

years are fast declining, and competitors like RIM and Apple are catching up very fast.

 • Nokia is still preferred by buyers with a purse of below 10,000 rupees.

But when the limit goes beyond that a drastic shift is seen towards smartphones from Apple and BlackBerry devices. 

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Secondary research

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Introduction

• Research In Motion (RIM) is a global leader in wireless innovation, which revolutionized the mobile industry with the introduction of the BlackBerry® solution in 1999.

• It is a Canadian global telecommunications company headquartered in Waterloo, Ontario, that designs, manufactures and markets wireless solutions for the worldwide mobile communications market.

• RIM provides platforms and solutions for access to information, including e-mail, voice, instant messaging, short message service (SMS), Internet and intranet-based applications and browsing.

• RIM’s portfolio includes the BlackBerry wireless solution, the RIM Wireless Handheld product line, software development tools and other software and hardware.

• The BlackBerry product line includes the BlackBerry® PlayBook™ tablet, the award-winning BlackBerry smartphone, software for businesses and accessories. BlackBerry products and services are used by millions of customers around the world on a daily basis.

STUDY OF THE SELECTED PRODUCT LINE

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Marketing Mix: The 4 Ps of Blackberry

THE PRODUCT BlackBerry is a line of wireless handheld devices developed by the Canadian company, Research In Motion (RIM).

The BlackBerry Smart Phone supports the following features:

• Push e-mail• Mobile telephone • Instant messaging features: BlackBerry Messenger

(BBM) • Text messaging • Internet faxing • Web browsing• Multi-touch interface• Other wireless information services

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• Blackberry models in India include:▫BlackBerry 8300 Series (Curve)▫BlackBerry Pearl▫BlackBerry Bold▫BlackBerry Torch ▫BlackBerry Bold 3G, etc.

• BlackBerry holds the world's second highest market share in the smart phone platform. The consumer BlackBerry Internet Service is available in 91 countries worldwide on over 500 mobile service operators using various mobile technologies.

• As of September 2011, there were seventy million BlackBerry users.

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BLACKBERRY MESSENGERBlackBerry devices use the proprietary BlackBerry Messenger, also known as BBM, software for sending and receiving instant messages via BlackBerry PIN. Blackberry Messenger is one of the fastest messengers on a smartphone.

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• BlackBerry Bold 9900 – Rs.32,290• BlackBerry Pearl 8120 – Rs.24,229• BlackBerry Pearl 3g 9100 –

Rs.16,333• BlackBerry Curve 9300 3g – Rs.13,597• BlackBerry Torch 2 9810 – Rs.25,000• BlackBerry Curve 8520 –

Rs.9,199(As on October 2011)

BlackBerry has strategically placed smartphones in all price ranges, as well as with different features to suit different needs. They have given people the option to choose from a variety of models according to their need and budget, while maintaining the availability of signature features like BlackBerry Messenger and Push-Mail service in all the brands so that the essence of having a BlackBerry can be experienced by all the users across different budget ranges. • “A variety of flexible tariff plans to choose from, thus making it easy for young fans

to turn BlackBerry loyalists. We have built up a portfolio at different price points to target different segments of consumers,”

 Krishnadeep Baruah, • Director (Marketing), RIM India.

PRICE

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PLACE- The Global Perspective

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American Virgin IslandsAnguillaAntigua and BarbudaArgentinaArubaAustraliaAustriaBahamasBarbadosBelgiumBermudaBrazilBritish Virgin IslandsCanadaCayman Islands ChileChinaColombiaCyprusCzech RepublicDenmarkDominicaEcuadorEstonia

French GuianaFinlandFormer YugoslavRepublic of Macedonia (FYROM)FranceGermanyGreeceGrenadaGuadeloupeGuamGuyanaHong KongHungaryIcelandIndiaIndonesiaIrelandIsle of ManItalyJamaicaJapanLatviaLiechtenstein

MalaysiaMaltaMartiniqueMexicoMoldovaMonacoMontserratNetherlandsNetherlands AntillesNew ZealandNorwayPanamaParaguayPeruPolandPortugalPuerto Rico Romania Russia Saint EustatiusSaint MartinSaint PierreSaint-BarthelemySaba

San MarinoSerbia & MontenegroSingaporeSlovakiaSloveniaSouth AfricaSpainSt. Kitts and NevisSt. LuciaSt. Vincent and the GrenadinesSuriname SwedenSwitzerlandTrinidad and TobagoTurkeyTurks and Caicos IslandsUnited KingdomUkraineUnited States UruguayVatican CityVenezuela

BlackBerry is currently available for sale in the following countries:

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The Indian Perspective

• As per data released by IDC, Nokia holds a strong 45.8% market share in smartphone shipments, followed by Samsung’s 21%. Research in Motion, the maker of Blackberry phones has a 15% market share. The top 3 manufacturers together, have a 81.9% market share, leaving a paltry 18% to the likes of Apple, LG, Motorola and Sony Ericsson.

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• When we analysed the Indian market, we found that Blackberry sales are restricted to the high-end urban market. This may be due to varied demands of a differentiated society. But in the college space as well as the corporate sector, BlackBerry has become a rage, with students and professionals alike preferring Blackberry over most other brands.

• The reason for the paltry numbers for brands like Apple is the heavy pricing which renders most customers unable to buy them. Various other brands like Motorola and Samsung still suffer from lack of customer confidence and loyalty, which Nokia strongly leverages and enjoys. 

• Excellent after sales services have been a strong point for Nokia, which BlackBerry is fast catching up with.

• The Indian market can be broadly divided into two sectors; the urban and rural markets. Both these markets differ drastically in terms of needs, demands, financial orientation and necessity of the consumers.

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THE DIFFERENTIATED INDIAN MARKET

• Business uses• Latest applications for the

business user• Advanced features and

applications• Lifestyle• Status symbol

Urban Users

• Affordability• Connectivity• Battery Life• Network expansion • Low tariffs• Lucrative Offers

Rural Users

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• TARGET MARKETSBlackBerry has divided its target market into two basic segments:

PROMOTION

Enterprise customersBlackBerry was a "company decision".

 

Non-Enterprise customersBlackBerry was a “personal decision”.

 Enterprise customers 

High end users Aged 25+ years Mainly mid to senior level management

professionals Cosmopolitan Professionals who use it for

office purpose Both males and females Tier I cities BlackBerry has already established leadership position in this segment.

  

Non-Enterprise customers  Aged 15-25 years Mainly students Individuals who use it for personal or

entertainment purposes Youth which will have financial power

tomorrow Both males and females Tier I cities Today, it has a range of models targeted at every possible consumer segment—senior management professionals, young executives, women, and even those who have barely crossed their teens.  

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MARKETING STRATEGY OF BLACKBERRY

Youth Marketing Strategy

• BlackBerry has been quick to understand the needs of its young customers.

• In the last 8-10 months, this segment has grown phenomenally. This segment comprises the youth who do not have the financial power today but will have so tomorrow. This segment, which has a huge need to be connected, is growing for smartphones and specifically for BlackBerry.

• So, while it has a range of pink, pearl and crimson models to entice women, there’s also a variety of flexible tariff plans to choose from, thus making it easy for young fans to turn BlackBerry loyalists.

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Repositioning of The Product through advertising

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‘Love what you do’This ad showcases every function of the Blackberry handset, inserting the tagline

‘love what you do’ on each one. ‘We’re the BlackBerry Boys’The ‘BlackBerry’ Boys advertisement

created by Ogilvy and Mather in 2010 said it all—this smartphone brand wasn’t meant only for stuffy corporate suits—the young

and the savvy in India were naturally inclined to this high-end gizmo.

We are BlackBerry Boys - Advt - New - Prepaid.mp4

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CONCLUSION All the above ads seem to have a common theme. Black Berry has set out to target a younger, more fun-focused consumer.  It can be concluded that the BlackBerry brand is repositioning itself, as its primary audience is no longer corporates.

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Use of Digital Media

• BlackBerry has been working hard over the last one year on the BlackBerry India website. The Blackberry India fan page on Facebook has 900,000 fans. Its India Twitter page allows people to get updates on the brand and stay connected with the latest news.

BlackBerry’s marketing strategy for the near term• BlackBerry will continue to address the high-end consumer

segment and the youth. They plan to launch some new features and products catering to a more diverse group of individuals.

• Beyond that, BlackBerry is also working on enhancing the product experience for the consumer. Its idea is that people should be able to walk into the nearest store and experience the product.

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CHALLENGESBlackBerry has contended with being pigeonholed as a strictly

business and professional product since its early roots. This stereotype has helped to define BlackBerry as a stable, reliable and

practical tool. On the other hand, it has limited its own target market by keeping the static business image.

Nokia was the 1st foreign player to enter the Indian market in 1995.• It gained its foothold by offerings basic

mobile phones in affordable price ranges.• Brand Focus:• Gaming options• Multimedia• GPRS• Faster Internet options

2001 – Sony Ericsson enters the Indian market

Introduced affordable Smartphones in the market such as hi-tech multimedia features, camera

phones, design phones, music phones, and web and email phones.

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Why BlackBerry Won Against APPLE

Sales for the world’s biggest company by market value, APPLE, are hindered by RIM. Apple shipped 62,043 iPhones to India in the quarter ending June 30, or fewer than to Norway, Belgium or Israel, according to estimates by Framingham, Massachusetts-based researcher IDC.

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Why BlackBerry Won Against APPLE

Reasons•Apple products aren’t as accessible in India.•The poor sales figures for Apple

smartphones has been attributed to Indian wireless carriers.

•Blackberry users have defended its utility over the iPhone.

•Moreover, Blackberry has a price range which appeals to wider range of customers

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SUGGESTIONS

ProblemTo Develop a

balance between business use and recreational use

Causes• No carrier is owned by

RIM• Carriers are concerned

with their own profit• No ownership of their

storesSolutions• Diversification of the

product• Product Depth• Market Development• Aggressive Promotion

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SWOT ANALYSISStrengths

World’s largest wireless design groupCredible organizationHigh product value of the BlackBerry line QWERTY keyboard feature on the smartphones BlackBerry messengerSureType and SurePress feature

WeaknessesLimited product line; only carries smartphones Risky foreign operations Weak launches of different phone types, eg. The BlackBerry flip phone Restrictive image of a product for professionals. Faces a “strictly businesss” stereotype, hence issues in repositioning.Limited market reach due to initial branding of RIM as “a business professional tool,”Opportunities

Expand product breadth Grow on international expansion Expanding depth in the smartphone line Develop and diversify marketing strategies Appeal to new markets

ThreatsWeakened economy due to the recession Possibility of becoming a passing trend Competition, more smartphone options, for example, the iPhone vs. BlackBerry Storm Reliance on retailer carriers alone to promote their products

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RECOMMENDED PLAN OF ACTION• Taking all alternatives into account, we have made the decision to

implement a more concentrated and aggressive marketing development strategy.

•   RIM BlackBerry’s plan of action will target their already existing client i.e. senior executives and young professionals, alongside a younger and more recreational based consumer, known as Generation Y. By aiming their sights on up and coming consumers, RIM can build upon relationships with their target market from a young age and develop their sustainability as a company simultaneously.

• RIM will actualize a new promotional campaign to address these potential consumers and attract them with the use of advertisements through television, viral marketing, radio, billboards and magazines. Though these sources are already used to promote the BlackBerry, RIM can revamp how they advertise.

• RIM must generate commercials that are brighter, more energetic, and most importantly, more memorable, thus appealing to a fresher audience. Another option for BlackBerry is product placement on television shows or films that appeal to the target audience. RIM will adopt a new way of thinking, and by cultivating an improved marketing development strategy, RIM can evolve as a brand and a corporation.

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Thank You